Good morning! Hopefully things are going well for everyone. One thing we aren't having is a merry Christmas. I wanted to write a post to call out several exchanges, whose behavior can be described as unethical in the best-case scenario. We ceased business with these exchanges, and after reading this, hopefully you'll understand why we urge customers not to send money to these exchanges until we see some policy changes.
First, there is the case of CCex. Recently, CCex posted the following message on their homepage:
From December, 20 till approximately January 20 we will switch to "limited service" mode for New Year vacations.
We will: provide trading service, API trading service, C-CEX codes creation and redeeming, fiat deposits and withdrawals.
We will not: provide all cryptocoin and tokens deposits and withdrawals, support ticket service.
If you need your cryptocurrency to trade here or elsewhere during "limited service" period - please, deposit or withdraw it before December, 20. Please, do not send any deposits during "limited service" period as they will not be posted to balances.
We will resume normal service after January, 20. We may resume normal service earlier.
To summarize this: customers can send money into CCex but it won't be credited (because there's no way to prevent money being sent to them), you can make them money by performing trades, but you can't get any money out. While they say they will withdrawal fiat currency, it's not realistic for most customers to set up withdrawals into the legacy banking system. Not only that, but their "vacation" period extends 20 days past the end of the holidays. I wish I could afford to take "holiday" vacations that last an extra three weeks.
To add to the concern, CCex recently stopped processing automatic withdrawals. API calls to withdrawal coins from their service began to fail over a month ago, and CCex has ignored support tickets submitted multiple times over a lengthy period about the issue. I can understand if the owners want to take a vacation - in that case, they should shut down trading, send out all balances, and then resume everything when they return. Allowing trading to make money while holding customers' balances is unethical and irresponsible. Do not send money to CCex, because it could get stuck there. Demand answers from CCex as to what they are doing with your money for a month.
Next up is Poloniex, which we see as a more serious threat due to its huge potential impact on the industry. For several weeks, we have been trying to get access to $600,000 that the site owes us. Since we initially requested the funds, which we had intended to invest to expand the project into SHA-256 mining, the value of the owed balance has declined to $400,000. That's more than one employee for an entire year that is now permanently lost because this is likely the start of a long bear market. The future of this site depends on Poloniex giving us our money before this bubble crashes down to what we believe will be a bottom with litecoins worth $20. We aren't ready yet to declare that they have committed theft, but we will be taking more aggressive action against the company should they fail to send us the thousands of litecoins they owe us by the end of the week.
Poloniex's situation should be extremely concerning to everyone, because of how specific their problems are. There are a limited number of coins that fail withdrawals. For example, bitcoins withdrawal fine, which is strange given that the network is unusable. On the other hand, litecoins and several other coins fail to withdrawal every single time. The transactions remain in "pending" state and never are published to the blockchain. The number of withdrawals viewable in the web console is limited to 50, so once "pending" withdrawals flow off the bottom of the page, they cannot be cancelled and support is unwilling to take action with them. We'll actually be writing a bot over the holiday week to iterate through every withdrawal_id and attempt cancellation directly with their REST interface, ignoring the ones that return unauthorized, in the hopes of recovering some of this money before it is worth nearly nothing.
We strongly recommend that customers do not send money to Poloniex and withdrawal money from the site as soon as possible until we receive our money or get an explanation. Customers who end up with stuck litecoin withdrawals appear to still be able to sell those coins to bitcoins and send them to other exchanges - at least until LTC prices at Poloniex begin to decouple due people realizing what is happening.
In conclusion, I want to make it clear that "the holidays" are not an excuse to hold customers' money without their authorization. Do not give your business to exchanges that fail to process withdrawals promptly. It's Christmas here too, and Chris was up until 5:00am last night, getting customers their money from our own accounts to make up for what these exchanges are doing. Tristan D' Augusto, CEO of Poloniex, needs to cancel his Christmas plans, get back to work, and provide an immediate explanation as to where the money is and what he plans to do to prevent this issue in the future. It is not acceptable for half a million dollars of our customers' money to disappear, with a specific pattern of issues, and to be run around support representatives for 10 days. We're not looking to buy an island with this money; all of this is actually owed in debts to miners like you.
I sincerely hope that both exchanges change their policies before any further action is necessary. Until then, have a Merry Christmas, but make sure you own your coins to put your mind at rest while you enjoy dinner tonight with your family!